Spain is facing a deepening housing crisis, with soaring rents, a shortage of homes and evictions leaving vulnerable tenants without a place to live. One woman spent two months sleeping in her car after being evicted from her home, while an 87-year-old pensioner was recently carried out of her Madrid apartment on a stretcher, triggering protests across the country.The crisis has put housing at the centre of Spain’s political debate, with tens of thousands of people taking to the streets and protesters camping in Madrid’s Puerta del Sol to demand lower housing costs and greater protection for tenants.The latest cases have highlighted how the country’s housing shortage is increasingly affecting people who have lived in their homes for years but can no longer afford to remain there or find another property at a similar price.Pilar Lopez, 65, spent two months living in her car after she was evicted this summer from the Palma de Mallorca apartment where she had lived for 12 years. She has a chronic condition resulting from a spinal injury and now lives in temporary accommodation at a hostal.Lopez said an investment fund bought the property from the bank with which she had a rental contract and subsequently offered her money to leave. She refused but was unable to stop the eviction.“I can see that they have refurbished it,” Lopez said outside her former home, which she believed had been converted into a holiday rental, as quoted by AFP.Her case came just days after 87-year-old Maricarmen Abascal was evicted from the Madrid apartment where she had lived for more than seven decades. Images of her being removed on a stretcher after police broke down her door sparked widespread anger and demonstrations.
So, how bad is Spain’s housing shortage?
The underlying problem is a shortage of homes.Spain has struggled to match the pace of construction seen before the 2008 financial crisis, while the number of households has continued to grow. The Bank of Spain estimates the country’s housing deficit at about 750,000 homes, with the shortfall expected to exceed 1 million by 2028.That imbalance has pushed more households into the rental market. At the same time, demand has been particularly strong in Madrid, Barcelona and tourist destinations, where employment, population growth and tourism have increased competition for available homes.The result has been a sharp rise in housing costs.The average rental price in Spain reached 15.10 euros per square metre in August, almost twice the level a decade earlier, according to property portal Idealista. Average home prices have also risen by more than 50 per cent over the same period, according to official figures.The average monthly rent of about 1,176 euros is equivalent to roughly 98.7 per cent of the average monthly salary, according to Spain’s Youth Council.
Why are rents rising?
The main pressure comes from the gap between demand and supply.Spain has not built enough new homes to meet the number of households seeking accommodation. With buying becoming increasingly expensive, more people are staying in or entering the rental market, further increasing competition for rental properties.Tourism has added another source of demand in some regions. In popular destinations such as the Balearic Islands, properties can be used for holiday accommodation rather than long-term rentals, reducing the supply available to local residents.The construction slowdown that followed the 2008 property crash has also had a lasting effect. Spain’s housing market has not returned to its earlier rate of homebuilding, leaving today’s demand to compete for a relatively constrained supply of housing.
Investment funds to blame?
Investment funds have become a focus of the protests because some high-profile eviction cases involve properties acquired by institutional investors.But funds are not the entire explanation for Spain’s housing shortage. Investment funds and holding companies account for about 8 per cent of the country’s property market, according to the Bank of Spain.The wider crisis reflects several factors, including insufficient new construction, rising household demand, high purchase prices, escalating rents and tourism-related pressure in some markets.
Tennant protections
Spain introduced temporary measures during the Covid-19 pandemic to protect vulnerable tenants from eviction. Those protections expired in March after opposition parties rejected their extension.Tenant organisations are now calling for automatic renewal of rental contracts, stronger restrictions on evictions, regulation of room-by-room rentals and a rent freeze.“The crumbs that Sánchez was prepared to offer us are no longer enough,” said Carme Arcarazo, spokesperson for Spain’s Confederation of Tenants’ Unions.Tenant groups also want landlords to provide justification for refusing to renew contracts, with compensation proposed in some cases where tenants are subsequently evicted.
Government proposal
Prime Minister Pedro Sanchez has promised new measures to address the crisis and is expected to take up the issue with his cabinet.His government faces a difficult political balancing act. Left-wing allies have backed stronger rent controls and automatic contract renewals, while Catalan nationalist party Junts has supported restrictions on evictions by so-called “vulture funds” but opposed measures it believes could reduce housing supply or penalise small landlords.